Did Fannie Cause the Disaster?

Gretchen Morgenson and Joshua Rosner’s Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon boldly and passionately asserts that the risk-taking of Fannie Mae and Freddie Mac was a major element in causing the housing bubble. This claim is not substantiated by persuasive analysis or by any hard evidence in the book. Yet it is being used by politicians and pundits to soften criticism of private business and by lobbyists and others who would water down the new regulations passed by Congress under the Dodd-Frank Act.

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